Tyco Healthcare Group LP v. Ethicon Endo-Surgery, Inc., No. 3:10cv60(JBA), 2013 WL 1294578 (D. Conn. Mar. 28, 2013).
The Tyco case provides an excellent example of a district court working through a damage analysis. It will be interesting to see if the Federal Circuit agrees with the decision to use the EMVR.
After a bench trial, the district court rejected rates offered by the parties’ damages experts and concluded that a rate of 8 percent was appropriate. Id. at *47. Based on sales of $1,751,000,000 the court awarded $140,080,000 to plaintiff. Id. at *48. The court considered damages issues in three key areas:
- EMVR – Applying the Rite-Hite test and observing that Defendant’s own expert had used the entire market value of the accused products in his calculation, the court decided to consider the entire market value of the accused devices in its damages analysis. Id. at *36-*37.
- Lost Profits – Applying the four-factor Panduit test, the court found that, although there was demand for the patented feature (Id. at *37-38), Plaintiff had failed to establish that the infringement caused lost sales under a Mor-Flo market share analysis. Id. at *39-43. Plaintiff’s causation evidence fell short of the “specific” and “far from speculative” evidence required by Mor-Flo. Id. at *43. Thus, lost profit damages were not available to Plaintiff.
- Reasonable Royalty – Closely reviewing the vying experts’ royalty opinions in light of the Georgia-Pacific factors, the court found that “neither expert’s proposed royalty rates sufficiently account for the parties’ respective positions, strengths, and weaknesses.” Id. at *47. The court then chose an 8 percent rate that was between Plaintiff’s rate of 12 percent to 15 percent and Defendant’s rate of 1.5 percent to 5 percent. Id. at *47.